Push-to-talk mobile market faces struggle in Europe

20 Jan 2004

Two leading industry analysts have cast doubt on whether push-to-talk mobile services, which are gaining popularity in the US, will succeed in Europe.

Both IDC and telecoms analyst Ovum in separate reports reckon that push-to-talk, a walkie-talkie service being offered on various networks around the world, will find it difficult to attract the attention of Western European users.

Using push-to-talk services, customers usually push a button for the immediate link-up rather than dialling a phone number and waiting for someone to answer. As well as this, only one person can talk at a time, resulting in cost savings from zero dead air. The concept is gaining widespread popularity in the US and today some 20 operators worldwide are offering services. The service is being championed in the US by Verizon, Sprint and Nextel. Nextel, in particular, has made significant strides in selling push-to-talk services to blue-collar enterprise sectors such as construction.

Last week Orange became the first European operator to announce the launch of push-to-talk services, with the launch of its Talk Now service planned for the second quarter. Orange’s service will also be the first such service to be launched on a GSM service through the Handspring Treo 600 and the Windows-based SPV smart phone. Unlike push-to-talk services in the US which are being snapped up by messengers, delivery employees and other mobile workers, Orange’s Talk Now service will be targeted initially at large enterprises with sophisticated services such as the ability to manage group lists and to set up and record group calls.

However, according to Ovum analyst John Delaney, Orange’s take on push-to-talk focusing on premium corporate services instead of appealing to the cost concerns of mobile users may not live up to the hype generated on the other side of the Atlantic.

Delaney said: “The success of Nextel’s service has meant that push-to-talk has attracted a lot of hype. However, it is far from clear that other operators are in a position to attract customers to push-to-talk at a similar rate to that achieved by Nextel.”

The main factors that will determine the outcome are pricing and handsets. If Talk Now is reasonably cheap to use, it could provide an attractive alternative not only to conventional telephony, but also to emerging enterprise communications services like instant messaging and IP centrex. If not, Talk Now will need to carve out a new niche market for itself. If it is only available on a small number of high-priced handsets, that will substantially push up the initial investment an enterprise would need to make in order to adopt Talk Now – and would confine the service to a relatively small percentage of its staff.

“Push-to-talk has finally reached the shores of Europe. But it still has a long way to go before we see any prospect of it living up to the hype that has travelled over with it,” Delaney said.

IDC, however, was fully in favour of the corporate market in Europe being quick to adopt push-to-talk, followed swiftly by consumer service. However, it warned that key hurdles would include delivering a user-friendly service that hides the underlying technological complexity and interoperability between networks.